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Sabre Reports First Quarter 2015 Results

May 7, 2015 Financial No Comments Email Email

Sabre Corporation (NASDAQ: SABR) today announced financial results for the quarter ended March 31, 2015.http://www.thailand.net.au/training/

“The first quarter marked a strong start to the year,” said Tom Klein, Sabre President and CEO.  “Sabre’s growth is being fueled by a strong pipeline of innovative, mission-critical solutions across all of our businesses, as demonstrated by our new long-term agreements with customers like Wyndham Hotel Group and LATAM Airlines Group, which we announced today.  This quarter’s momentum increases our confidence that we will achieve our full-year objectives.”

Q1 2015 Financial Summary

Sabre consolidated first quarter revenue increased 6.6% to $710 million, compared to $666 million for the same period last year.

Net income from continuing operations totaled $49 million, compared to $22 million in the first quarter of 2014. Consolidated Adjusted EBITDA was $244 million, a 15.3% increase from $211 million in the prior year first quarter. The increase in consolidated Adjusted EBITDA is the result of 33.7% growth in Airline and Hospitality Solutions Adjusted EBITDA and an 8.0% increase in Travel Network Adjusted EBITDA.

For the quarter, Sabre reported Income from continuing operations of $0.18 per share and Adjusted Net Income from continuing operations (Adjusted EPS) of $0.27 per share.

Cash flow from operations totaled $132 million, compared to $94 million in the first quarter of 2014. Free Cash Flow was $70 million, compared to $45 million in the year ago period. Adjusted Capital Expenditures, which includes capitalized implementation costs, totaled $76 million, compared to $57 million in the first quarter of 2014.

Three Months Ended March 31,

Financial Highlights (in thousands; unaudited):

2015

2014

% Change

Total Company (Continuing Operations):

Revenue

$

710,348

$

666,415

6.6

Income (loss) from continuing operations

$

49,330

$

21,959

124.6

Adjusted EBITDA*

$

243,586

$

211,263

15.3

Cash Flow from Operations

$

131,773

$

94,322

39.7

Capital Expenditures

$

61,912

$

49,658

24.7

Adjusted Capital Expenditures*

$

76,239

$

57,311

33.0

Free Cash Flow*

$

69,861

$

44,664

56.4

Adjusted Free Cash Flow*

$

84,090

$

60,969

37.9

Net Debt (total debt, less cash)

$

2,632,432

$

3,443,016

Net Debt / LTM Adjusted EBITDA

3.0

x

4.4

x

Airline and Hospitality Solutions:

Revenue

$

204,900

$

176,717

15.9

Passengers Boarded

126,092

117,616

7.2

Operating Income

$

28,491

$

26,462

7.7

Adjusted EBITDA*

$

71,488

$

53,460

33.7

Travel Network:

Revenue

$

507,930

$

491,726

3.3

Air Bookings

91,423

89,045

2.7

Non-air Bookings

14,011

13,598

3.0

Total Bookings

105,434

102,643

2.7

Bookings Share

35.7

%

35.4

%

Operating Income

$

197,251

$

184,517

6.9

Adjusted EBITDA*

$

232,087

$

214,843

8.0

*indicates non-GAAP financial measure; see descriptions and reconciliations below

Sabre Airline and Hospitality Solutions

First quarter 2015 Airline and Hospitality Solutions revenue increased 15.9% to $205 million from $177 million in the prior year period. The increase was driven by a 7.2% increase in passengers boarded through the SabreSonic® Customer Sales & Service (CSS) solution and strong growth in Sabre Hospitality Solutions.

Sabre Airline and Hospitality Solutions Adjusted EBITDA increased 33.7% to $71 million from $53 million in the prior year period. The increase in Adjusted EBITDA is the result of strong revenue growth and technology platform scale benefits, resulting in an Adjusted EBITDA margin of 34.9%, compared to 30.3% for the prior year quarter.

In the quarter, Wyndham Hotel Group selected the SynXis® Central Reservations Solution to power distribution and reservations for its 7,500 global properties. In December 2014, Wyndham Hotel Group announced that it would transition its 4,500 North American properties to the SynXis Property Manager Solution. These combined agreements make Wyndham Hotel Group the first hotel company to fully leverage the cloud-based SaaS reservations, property management and enhanced security solutions of the SynXis Enterprise Platform. Also in the first quarter, Four Seasons Hotels & Resorts contracted to migrate its properties to the SynXis Central Reservations Solution.

Today, Sabre announced LATAM Airlines Group would extend their use of SabreSonic CSS reservations across its entire network including LAN Airlines, which is a current SabreSonic CSS customer, as well as TAM Airlines, which will migrate to SabreSonic CSS. TAM is Brazil’s largest airline. Combined, LATAM Airlines Group is one of the top ten largest airlines in the world, with more than 67 million passengers boarded annually.

With the addition of the expanded LATAM agreement, Sabre Airline Solutions’ implementation pipeline represents more than 290 million passengers boarded annually to be implemented in 2015 through 2017, up from 250 million at year end.

Sabre Travel Network

First quarter Travel Network revenue increased 3.3% to $508 million, compared to $492 million for the same period in 2014. Bookings increased 2.7%, with increasing momentum as the quarter progressed. Continued sales success resulted in strong Sabre bookings growth of 10% in Europe, Middle East and Africa (EMEA), compared to less than one percent growth for the EMEA market overall.

First quarter 2015 Travel Network Adjusted EBITDA increased 8.0% to $232 million.

Refinancing Activity

Early in the second quarter, Sabre redeemed $480 million of 8.5% 2019 maturity bonds. These bonds were redeemed through the issuance of $530 million, 5.375% senior secured notes due in 2023, which substantially covered the redeemed notes’ principal, accrued interest and related fees, premiums and expenses.

Dividend

Sabre’s Board of Directors has declared a quarterly dividend of $0.09 cents per share on the Company’s common stock. The dividend will be payable on June 30, 2015, to stockholders of record on June 19, 2015.

Business Outlook and Financial Guidance

Sabre reiterated full-year guidance for 2015.

  • In Airline and Hospitality Solutions, Sabre expects 2015 revenue growth of between 9% and 11%.  Passengers boarded are expected to increase approximately 10% in 2015, including strong growth in the fourth quarter related to scheduled SabreSonic CSS customer implementations.
  • In Travel Network, Sabre expects 2015 revenue growth of 4% or more, driven by bookings growth of approximately 3%.
  • 2015 Adjusted Net Income and Adjusted EPS guidance remain unchanged at $275 million to $290 million and $1.00 to $1.06, respectively.  Free Cash Flow and Adjusted Free Cash Flow guidance are unchanged at more than $250 million and more than$300 million, respectively.

In summary, for the full year 2015, Sabre continues to expect the following results from continuing operations:

Full Year 2015 Guidance

Sabre

($ millions, except for EPS)

Revenue

$2,770 – $2,800

Adjusted EBITDA

$895 – $910

Adjusted Net Income

$275 – $290

Adjusted EPS

$1.00 – $1.06

Conference Call

Sabre will conduct its first quarter 2015 investor conference call today at 9:00 a.m. Eastern Time.  The live webcast, including accompanying slide presentation, can be accessed via the Sabre Investor Relations website at investors.sabre.com.  A recording of the call will be archived for replay following the conference call.

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